Senators Propose FSA Carry Forward

February 11, 2005 (PLANSPONSOR.com) - A bipartisan
US Senate group has proposed allowing workers to carry
forward up to $500 in unused Flexible Spending Account (FSA)
funds to the next year or move the money to a Health Savings
Account (HSA).

Nearly 37 million private-sector employees have
access to FSAs, however, less than seven million take
advantage of them, according to DeMint. However,
approximately 76% of FSA participants will take advantage
of the rollover option each year, according to the Joint
Committee on Taxation.

“FSAs are already very helpful tools, but we can make
them even better,” DeMint said in the statement. “These
accounts allow people to save for unforeseen medical
expenses, yet they lose all of the unspent money they saved
at the end of the year. This “use-it-or-lose-it” rule ends
up penalizing workers and it just doesn’t make sense.”

“Giving employees the ability to rollover funds to
the next year will encourage more people to participate
in FSAs because they can better manage their hard-earned
money,” said Salazar, in the statement. “We have to start
allowing Americans to better save for their own health
care and give individuals more control over their health
care decisions.”

DeMint said he had introduced the bill in the House where
it was approved in May 2004, but later died in the
Senate.